As bankrupt crypto lenders such as BlockFi, Celsius, and Voyager halt withdrawals for customer funds, questions surrounding customer accounts have arisen. Blockchain sleuths have begun following digital footprints to uncover answers.
Voyager claims its bankruptcy plan will provide customers access to US dollars held with Metropolitan Commercial Bank as well as access to their locked cryptocurrencies, proceeds from 3AC recovery efforts and common shares in a reorganized firm.
FTX offers liquidity to Voyager’s customers
After Voyager Digital filed for bankruptcy, Binance US and crypto trading platform FTX announced they’d acquire some of its assets at fair market value for cash payment. Customers would then be able to withdraw funds and use them on FTX to purchase more digital assets.
Voyager’s offer also gives its 3.5 million customers early liquidity that may help them avoid years-long legal proceedings and other risks, like Magnolia who’s been losing income because she can no longer access her funds.
Magnolia and other Voyager Digital customers held an interactive YouTube town hall, asking questions of company representatives in real-time and getting answers that will become public later this month. Meanwhile, companies promised updates regarding processes and timelines for providing settlements.
Binance reinstates fees
Voyager’s announcement to temporarily halt withdrawals and deposits echoes moves made by other troubled crypto firms, such as Celsius’ staking and lending platform which recently suspended swaps and transfers due to “extreme market conditions”.
Bloomberg reports that the US Commodity Futures Trading Commission intends to file charges against Stephen Ehrlich of violating derivatives rules prior to Voyager’s collapse, according to an announcement by regulators. They allege he mislead customers about the safety of their assets.
Voyager’s marketing message encouraged consumers to deposit cash and cryptocurrency with them by promising that its USD coins tracked the value of the US dollar, while also advertising that Metropolitan Commercial Bank, one of its banking partners, was FDIC insured; unfortunately this does not cover Voyager’s losses; bankruptcy auction is now scheduled for this company holding $1.3 billion worth of assets; investors despite these challenges appear relatively calm; Bitcoin rose approximately 2% and Ethereum by about 4% since January.
Voyager’s bankruptcy auction draws interest
Voyager Digital’s customers may finally be able to withdraw part of their assets after almost one year of it shutting down its main operations and suspending customer deposits with them. Voyager had pledged to return around 35% of what had been deposited with it using bitcoin and stablecoin USDC as funds for deposits.
According to court filings, Voyager has received multiple bids for its assets and will hold a hearing to review and approve auction results on September 29.
Voyager’s Unsecured Creditors Committee hosted a virtual town hall before its auction to address customer inquiries and answer queries from account holders. Through livestream, this panel discussed bankruptcy proceedings so far and how account holders could submit proof-of-claims, with claims reimbursed either via cryptocurrency or cash as per group estimates. Several panelists expressed disappointment at Voyager, in particular CEO Stephen Ehrlich.
Three Arrows Capital files for bankruptcy
Three Arrows Capital (3AC) has filed for bankruptcy protection in a New York court following an order by a British Virgin Islands court to liquidate. Teneo Restructuring has been appointed as its insolvency manager.
3AC is currently facing insolvency as a result of its investments in Luna and TerraUSD stablecoins which recently collapsed, wiping out $40 billion worth in market value and prompting other major cryptocurrency prices to fall and Voyager Digital’s platform to halt trading and deposits on its platform.
Liquidators for 3AC’s co-founders Zhu Su and Kyle Davies remain unaware of their whereabouts; however, photos taken of 3AC’s old Singapore offices during liquidators’ visit this summer showed mail piling up outside empty offices. On January 11, Davies tweeted that an ad-hoc creditors group had been formed that will hold regular meetings.
